Alabama education advocates warn of mass teacher exodus

Wednesday

Sep 21, 2011 at 9:48 PM

MONTGOMERY — As many as 10,000 teachers and support workers could retire early, in the middle of the school year, because of a new state law that increases retiree medical insurance premiums beginning Jan. 1.

By Dana BeyerleTimes Montgomery Bureau

MONTGOMERY — As many as 10,000 teachers and support workers could retire early, in the middle of the school year, because of a new state law that increases retiree medical insurance premiums beginning Jan. 1.School Superintendents of Alabama Executive Director Eric G. Mackey and Governmental Affairs Director Lisa Woodard in an August letter asked Gov. Robert Bentley to include changes to the new law in a special legislative session he may call in November.They want the effective date of the so-called PEEHIP sliding scale law pushed to the summer of 2012 to avoid potential mass retirements of eligible teachers Dec. 1, the middle of the 2011-2012 school year.“Changing the date to July 1 may not reduce the large number of people who will retire, but it will prevent the disruptive impact of mid-year retirements,” Mackey and Woodard wrote Bentley on Aug. 16.Woodard on Tuesday said as many as 10,000 teachers and support personnel in K-12 and two-year school systems could choose to retire Dec. 1, instead of the end of this school year, to avoid higher retiree medical costs.“Anyone who was going to retire in July will now retire in December,” Woodard said. “We’re trying to get it fixed so we don’t have a large exodus.”Ed Miller, superintendent of Gadsden City Schools, said superintendents are concerned about a midyear staff exodus. He said eight to 10 employees have indicated they intend to retire earlier than expected.“It obviously disrupts the continuity in the classroom,” Miller said. “Delaying this until summer certainly would be beneficial.”State Rep. John Merrill, R-Tuscaloosa, said a Jan. 1 retirement disrupts the school year.“That was an unintended consequence,” he said of the law. “I don’t know what the date will be, but it ought to be after the finish of the school year without punishing the teachers.”Senate Majority Leader Del Marsh, R-Anniston, the sponsor of the original sliding-scale bill, on Wednesday said he doesn’t have a problem pushing the Dec. 31 effective date of the law back six months to prevent school disruptions.Marsh said he does not believe there will be a mass employee exodus on Dec. 1, but he is willing to support a date change if Bentley includes it in a special legislative session that he may call on affordable insurance and the Jefferson County sewer issue.“If six months keeps everybody happy, I’m not against it,” Marsh said. “I don’t think six months will make any difference. I’m not convinced it will be a problem, but we’ll take care of it.”Jennifer Ardis, Bentley’s press secretary, responded to the SSA’s request to include a date change in the session.“The governor is committed to work on the situation in a special session if one is called,” Ardis said. “He is willing to work with the legislative leadership on it.”Mackey and Woodard said the SSA tried to amend the implementation date in the 2011 legislative session, “but the whirlwind of the session’s final day prohibited our eventual success.”The law creates a sliding scale for education retiree medical insurance premiums based on an employee’s number of years in the retirement system and the number of years away from Medicare eligibility, normally age 65.The state retirement system said the number of potential retirees on Dec. 1 is 10,081. That includes 4,835 employees with at least 25 years in the system, but who are younger than 65 years old. Another 5,246 who have at least 10 years in the retirement system and are younger than 65 are eligible to retire on Dec. 1.A similar bill affecting state employees takes effect Jan. 1, but their early retirements won’t disrupt school. Alabama State Employees Association Executive Director E.J. “Mac” McArthur Jr. said he believes the higher premiums will induce some state employees to retire earlier than anticipated.Since a retirement begins on the first day of a month, Dec. 1 is the latest an education employee can retire and not pay higher medical insurance premiums. Retirement requires at least a 30-day advance notice, so anyone wanting to retire on Dec. 1 must turn in his or her paperwork by Nov. 1. That creates the urgency.Marc Reynolds, deputy director of the Retirement Systems of Alabama, said an eligible employee can submit his or her paperwork by Nov. 1 just to be safe, but may rescind the notice at the last moment in case the Legislature moves the date back.Woodard said higher-paid school employees may not want to retire early, but many support personnel might choose to because higher premiums will have a bigger relative impact on their retirement check.The law changes health care premiums for the Public Education Employees Health Insurance Plan. Employees with less than 25 years of service who retire after Dec. 31 will see the state’s contribution to health insurance premiums reduced by 4 percent for each year of service less than 25. For employees who aren’t eligible for Medicare, the state’s contribution will decrease another 1 percent for each year between their ages and the Medicare eligibility age.One retirement example provided by the SSA shows a 60-year-old single teacher with 10 years in the retirement system would end up paying $10,564 more in premiums over five years by retiring on Jan. 1 instead of Dec. 1.The $10,564 over five years is the difference in the state’s contribution that would be picked up by an employee who retires on Jan. 1.Family medical insurance coverage for a 50-year-old with 25 years in the system would be $7,926 more over five years if he or she retires on Jan. 1 instead of Dec. 1.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.

Advertising

Online Services

Original content available for non-commercial use under a Creative Commons license, except where noted.
Gadsden Times ~ 401 Locust St. Gadsden, AL 35901, Gadsden, AL 35901 ~ Privacy Policy ~ Terms Of Service